[Federal Register Volume 60, Number 109 (Wednesday, June 7, 1995)]
[Rules and Regulations]
[Pages 29962-29965]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13920]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 1230
RIN 0581-AB36
[No. LS-94-010]
Pork Promotion, Research, and Consumer Information Act of 1985--
Increase in Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: Pursuant to the Pork Promotion, Research, and Consumer
Information Act of 1985 (Act) and the Pork Promotion, Research, and
Consumer Information Order (Order) thereunder, this final rule
increases the rate of assessment of 0.35 percent of market value of
porcine animals to 0.45 percent; and adjusts the amount of assessment
per pound due on imported pork and pork products to reflect the
assessment rate increase of 0.10 percent and the decrease in the 1994
average price for domestic barrows and gilts. The assessment increase
and the adjustment in assessments on imported pork and pork products
will increase annual funding of the promotion, research, and consumer
information program by an estimated $10 million to $12 million over a
12-month period.
EFFECTIVE DATE: September 3, 1995.
ADDRESSES: Ralph L. Tapp, Chief; Marketing Programs Branch; Livestock
[[Page 29963]] and Seed Division; Agricultural Marketing Service (AMS),
USDA; P.O. Box 96456, Room 2606-S; Washington, DC 20090-6456.
FOR FURTHER INFORMATION CONTACT: Ralph L. Tapp, Chief, Marketing
Programs Branch, 202/720-1115.
SUPPLEMENTARY INFORMATION:
Executive Orders 12866 and 12778 and Regulatory Flexibility Act
This rule has been determined to be not significant for purposes of
Executive Order 12866, and therefore has not been reviewed by the
Office of Management and Budget.
This final rule has been reviewed under Executive Order 12778,
Civil Justice Reform. This final rule is not intended to have a
retroactive effect. The Act states that the statute is intended to
occupy the field of promotion and consumer education involving pork and
pork products and of obtaining funds thereof from pork producers and
that the regulation of such activity (other than a regulation or
requirement relating to a matter of public health or the provision of
State or local funds for such activity) that is in addition to or
different from the Act may not be imposed by a State.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 1625 of the Act, a
person subject to an order may file a petition with the Secretary
stating that such order, a provision of such order or an obligation
imposed in connection with such order is not in accordance with law;
and requesting a modification of the order or an exemption from the
order. Such person is afforded the opportunity for a hearing on the
petition. After the hearing, the Secretary would rule on the petition.
The Act provides that the district court of the United States in the
district in which the person resides or does business has jurisdiction
to review the Secretary's determination, if a complaint is filed not
later than 20 days after the date such person receives notice of such
determination.
Information available to the Department indicates that nearly all
of the estimated 278,000 pork producers and many of the estimated 200
importers can be classified as small entities. This final rule
increases the rate of the assessment from 0.35 percent of the market
value of porcine animals to 0.45 percent, and increases the cents per
pound and per kilogram of assessments on imported pork and pork
products subject to assessment. Adjusting the rate of assessment from
0.35 to 0.45 percent and increasing the assessment on imported pork and
pork products results in an estimated increase in assessments of $10
million to $12 million over a 12-month period. However, the gross
market value of all swine marketed in the United States during 1993
exceeded $10.6 billion. The economic impact of the assessments will not
be a significant part of the total market value of swine.
This rule also adjusts importer assessments to reflect the increase
in the assessment rate from 0.35 to 0.45 percent and to reflect a
decrease in the 1994 average market price for domestic barrows and
gilts. The combined effect of the assessment rate increase and the
decrease in the average market price increases the assessments on
imported pork and pork products subject to assessments by two- to four-
hundredths of a cent per pound, or as expressed in cents per kilogram,
four- to nine-hundredths of a cent per kilogram. Adjusting the
assessments on imported pork and pork products would result in an
estimated increase in assessments of $175,000 over a 12-month period.
Accordingly, the Administrator of AMS has determined that this
action will not have a significant economic impact on a substantial
number of small entities.
The information collection requirements contained in part 1230,
subparts A and B, have been previously approved by the Office of
Management and Budget (OMB) and have been assigned OMB Control Number
0851-0151.
The Act (7 U.S.C. 4801-4819) approved December 23, 1985, authorized
the establishment of a national pork promotion, research, and consumer
information program. The program is funded by an assessment rate of
0.35 percent of the market value of all porcine animals marketed in the
United States and an equivalent amount of assessment on imported
porcine animals, pork, and pork products. The final Order establishing
a pork promotion, research, and consumer information program was
published in the September 5, 1986, issue of the Federal Register (51
FR 31898; as corrected, at 51 FR 36383, and amended at 53 FR 1909, 53
FR 30243, 56 FR 4, and 56 FR 51635). Assessments began on November 1,
1986.
The Order requires that producers pay to the Board an assessment of
0.35 percent of the market value of each porcine animal upon sale.
However, for purposes of collecting and remitting assessments, porcine
animals are divided into three separate categories (1) feeder pigs, (2)
slaughter hogs, and (3) breeding stock. The Order specifies that
purchasers of feeder pigs, slaughter hogs, and breeding stock shall
collect an assessment on these animals if assessments are due. The
Order further provides that for the purpose of collecting and remitting
assessments persons engaged as a commission merchant, auction market or
livestock market in the business of receiving such porcine animals for
sale on commission for or on behalf of a producer shall be deemed to be
a purchaser.
The Order requires importers of porcine animals to pay the U.S.
Customs Service (USCS), upon importation, the assessment of 0.35
percent of the porcine animal's declared value and importers of pork
and pork products to pay USCS, upon importation, the assessment of 0.35
percent of the market value of the live porcine animals from which such
pork and pork products were produced.
The procedures for collection and remittance of assessments are
specified in Sec. 1230.71 of the Order.
Pursuant to section 1620 of the Act, the assessment rate of 0.25
percent of the market value of porcine animals, pork, or pork products
sold or imported was established in the initial Order and was changed
to 0.35 percent on December 1, 1991. Based on the assessment rate of
0.35 percent, the total annual assessments collected during 1994 were
approximately $42 million. Assessments on imported pork and pork
products accounted for about $1.5 million of the total.
The Act and Sec. 1230.71 of the Order contain provisions for
increasing the initial rate of assessment. Section 1620(b)(2) of the
Act provides that the rate of the assessment in the initial Order may
be increased by not more than 0.1 percent per year upon recommendation
of the National Pork Producers Delegate Body (Delegate Body) whose
producer and importer members are appointed annually by the Secretary.
The Act further provides that the rate of assessment may be increased
by no more than 0.1 percent annually not to exceed 0.5 percent of the
market value unless the Delegate Body recommends a greater increase and
the increase is approved in a referendum.
The 1994 Delegate Body, at its annual meeting on March 3-5, 1994,
in Kansas City, Missouri, voted overwhelmingly to recommend to the
Secretary that the rate of assessment of 0.35 percent be increased to
0.45 percent. There were 170 Delegate Body members appointed by the
Secretary in 1994. At the Delegate Body meeting 154 delegates were
present during voting and voted 37,226 valid share votes. States and
importers are allotted one share per $1,000 of the
[[Page 29964]] aggregated amount of assessment collected. There were
31,089 share votes cast in favor of the 0.1 percent increase.
On February 15, 1995, AMS published in the Federal Register (60 FR
8579) a proposed rule to increase the rate of assessment of 0.35
percent of market value of porcine animals to 0.45 percent; and adjust
the amount of assessment per pound due on imported pork and pork
products to reflect the assessment rate increase of 0.10 percent and
the decrease in the 1994 average price for domestic barrows and gilts.
The proposed rule was published with a request for comments by March
17, 1995.
The following example will illustrate the effect of the increase of
0.10 percent on a per head basis. Based on the 1994 annual average five
market price of $39.57 per hundredweight for barrows and gilts with an
average weight of 248 pounds as reported in the USDA's publication
``Livestock, Meat, and Wool Weekly Summary and Statistics'' published
in January 1995, the total assessment per head at the assessment rate
of 0.45 percent would be 44 cents. At the assessment rate of 0.35
percent, the total per-head assessment would be 34 cents. Based on the
Delegate Body's recommendation in accordance with Sec. 1230.71(d) of
the Order, this final rule increases the rate of assessment from 0.35
to 0.45 percent, which would increase assessments collected $10 million
to $12 million over a 12-month period.
This final rule also increases the amount of assessment on all of
the imported pork and pork products subject to assessment as published
in the Federal Register as a final rule September 8, 1994, and
effective on October 11, 1994 (59 FR 46323). This adjustment reflects
the increase in the assessment rate to 0.45 percent and would be
consistent with the decrease in the annual average price of domestic
barrows and gilts for calendar year 1994 as reported by USDA, AMS,
Livestock and Grain Market News (LGMN) Branch. This adjustment in
assessments will make the equivalent market value of the live porcine
animal from which the imported pork and pork products were derived
reflect the recent decrease in the market value of domestic porcine
animals, thereby promoting comparability between the importer and
domestic assessments.
The methodology for determining the per-pound amounts for imported
pork and pork products was described in the supplementary information
accompanying the Order and published in the September 5, 1986, Federal
Register at 51 FR 31901. The weight of imported pork and pork products
is converted to a carcass weight equivalent by utilizing conversion
factors which are published in the USDA Statistical Bulletin No. 616
``Conversion Factors and Weights and Measures.'' These conversion
factors take into account the removal of bone, weight lost in cooking
or other processing, and the nonpork components of pork products.
Secondly, the carcass weight equivalent is converted to a live animal
equivalent weight by dividing the carcass weight equivalent by 70
percent, which is the average dressing percentage of porcine animals in
the United States. Thirdly, the equivalent value of the live porcine
animal is determined by multiplying the live animal equivalent weight
by an annual average market price for barrows and gilts as reported by
the USDA, AMS, LGMN Branch. The annual average price, which was based
on price data from six major markets, is now based on only five markets
as one of the six markets--St. Louis--closed in 1994. This average
price is published on a yearly basis during the month of January in the
LGMN Branch's publication ``Livestock, Meat, and Wool Weekly Summary
and Statistics.'' Finally, the equivalent value is multiplied by the
applicable assessment rate of 0.45 percent due on imported pork and
pork products. The end result is expressed in an amount per pound for
each type of pork or pork product. To determine the amount per kilogram
for pork and pork products subject to assessment under the Act and
Order, the cent-per-pound assessments are multiplied by a metric
conversion factor 2.2046 and carried to the sixth decimal.
The formula in the preamble for the Order at 51 FR 31901
contemplated that it would be necessary to recalculate the equivalent
live animal value of imported pork and pork products to reflect
increases in the rate of assessments or changes in the annual average
price of domestic barrows and gilts to maintain equity of assessments
between domestic porcine animals and imported pork and pork products.
Substituting the assessment rate of 0.45 percent in the formula and
using the 1994 average annual five market price for domestic barrows
and gilts of $39.57 per hundredweight results in an increase in
assessments for all the Harmonized Tariff Systems (HTS) numbers in the
table in Sec. 1230.110, 59 FR 46323; September 8, 1994, of an amount
equal to two- to four-hundredths of a cent per pound, or as expressed
in cents per kilogram, four- to nine-hundredths of a cent per kilogram.
Based on Department of Commerce, Bureau of Census, data on the volume
of imported pork and pork products available for the period January 1,
1994, through September 30, 1994, the increase in the assessment
amounts would result in an estimated $175,000 increase in importer
assessments over a 12-month period.
The Department's review of the supplementary information revealed
that the location of the March 3-5, 1994, Delegate Body meeting was
incorrectly listed as Denver, Colorado. The meeting was held in Kansas
City, Missouri, and the supplementary information has been corrected.
The Department received 87 comments after the publication of the
proposed rule. Thirty-four commenters, including the National Pork
Board, the National Pork Producers Council, 23 State pork producer
associations representing over 62,000 producers which represents a
significant proportion of the estimated State producer association
members nationwide, and 9 individuals supported the rate increase
stating that it would provide additional opportunities for enhanced
returns to pork producers and it is consistent with industry goals and
plans. Fifty-one individual commenters did not support the rate
increase, citing the decline in live hog prices, disfavor with the
program and suggesting that the current rate was high enough or that
there should be no assessment at all. Two commenters did not
specifically address the proposed assessment rate increase; however
they both believed the pork promotion program was successful.
One of the two commenters argued that the comment period of 30 days
was not sufficient time for producers to review the proposed rule and
submit comments since most pork producers do not receive the Federal
Register. The Department believes that a 30 day comment period is
sufficient to allow for public comment. A press release was issued when
the proposed rule was published to facilitate timely notification of
interested parties of their opportunity to comment. The press release
also indicated that interested persons could request copies of the
proposed rule either by the phone or mail and listed the phone number
and address. The other commenter expressed concern about the magnitude
of the price spread between the wholesale price and retail price for
pork.
The Department carefully considered the comments, the
recommendation of the Delegate Body and additional information
regarding the usefulness of the proposed assessment rate increase. It
has been determined that the additional [[Page 29965]] revenues which
will be gained from the increase will be useful in strengthening the
position of the pork industry in the marketplace and in maintaining,
developing, and expanding markets for pork and pork products.
The increase in total annual assessments, resulting from the
increase in the assessment rate from .35 to .45 percent, will enable
the pork promotion and research program to continue the funding pattern
that has helped keep pork competitive with other meats and poultry
since 1987. The increase will also provide the necessary funding to
finance the pork industry's long range strategic plan which will
address issues and initiatives that pork producers and importers
believe will have the most significant economic impact on the future of
the industry. These issues include environmental management, odor
control, animal care, swine health, and food safety. The increase in
annual assessment will provide the additional funding necessary to help
producers take full advantage of the enhanced foreign trade
opportunities created by NAFTA and GATT. In voting for the assessment
rate increase, the National Pork Producers Delegate Body believed that
the increase was necessary to make sure all producers have access to
the latest research, technology, and information available to help them
remain competitive in a rapidly changing industry.
Accordingly, this final rule adopts the increase in the assessment
rate from 0.35 percent of market value of porcine animals to 0.45
percent as proposed; and the adjustment in the amount of assessment per
pound due on imported pork and pork products to reflect the assessment
rate increase of 0.10 percent and the decrease in the 1994 average
price for domestic barrows and gilts as proposed.
List of Subjects in 7 CFR Part 1230
Administrative practice and procedure, Advertising, Agriculture
research, Marketing agreement, Meat and meat products, Pork and pork
products.
For the reasons set forth in the preamble, 7 CFR part 1230 is
amended as set forth below:
PART 1230--PORK PROMOTION, RESEARCH, AND CONSUMER INFORMATION
1. The authority citation for 7 CFR Part 1230 continues to read as
follows:
Authority: 7 U.S.C. 4801-4819.
Subpart--[Amended]
2. Subpart B--Rules and Regulations is amended by revising
Sec. 1220.110 to read as follows:
Sec. 1230.110 Assessments on imported pork and pork products.
(a) The following HTS categories of imported live porcine animals
are subject to assessment at the rate specified.
------------------------------------------------------------------------
Live porcine animals Assessment
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0103.10.0000....................... 0.45 percent Customs Entered Value.
0103.91.0000....................... 0.45 percent Customs Entered Value.
0103.92.0000....................... 0.45 percent Customs Entered Value.
------------------------------------------------------------------------
(b) The following HTS categories of imported pork and pork products
are subject to assessment at the rates specified.
------------------------------------------------------------------------
Assessment
Pork and pork products -----------------------
cents/lb cents/kg
------------------------------------------------------------------------
0203.11.0000.................................... .25 .551150
0203.12.1010.................................... .25 .551150
0203.12.1020.................................... .25 .551150
0203.12.9010.................................... .25 .551150
0203.12.9020.................................... .25 .551150
0203.19.2010.................................... .30 .661380
0203.19.2090.................................... .30 .661380
0203.19.4010.................................... .25 .551150
0203.19.4090.................................... .25 .551150
0203.21.0000.................................... .25 .551150
0203.22.1000.................................... .25 .551150
0203.22.9000.................................... .25 .551150
0203.29.2000.................................... .30 .661380
0203.29.4000.................................... .25 .551150
0206.30.0000.................................... .25 .551150
0206.41.0000.................................... .25 .551150
0206.49.0000.................................... .25 .551150
0210.11.0010.................................... .25 .551150
0210.11.0020.................................... .25 .551150
0210.12.0020.................................... .25 .551150
0210.12.0040.................................... .25 .551150
0210.19.0010.................................... .30 .661380
0210.19.0090.................................... .30 .661380
1601.00.2010.................................... .35 .771610
1601.00.2090.................................... .35 .771610
1602.41.2020.................................... .38 .837748
1602.41.2040.................................... .38 .837748
1602.41.9000.................................... .25 .551150
1602.42.2020.................................... .38 .837748
1602.42.2040.................................... .38 .837748
1602.42.4000.................................... .25 .551150
1602.49.2000.................................... .35 .771610
1602.49.4000.................................... .30 .661380
------------------------------------------------------------------------
3. Subpart B-Rules and Regulations is amended by revising
Sec. 1230.112 to read as follows:
Sec. 1230.112 Rate of assessment.
In accordance with Sec. 1230.71(d) the rate of assessment shall be
0.45 percent of market value.
Dated: June 1, 1995.
Lon Hatamiya,
Administrator.
[FR Doc. 95-13920 Filed 6-6-95; 8:45 am]
BILLING CODE 3410-02-P
